Gold Wavers as Traders Digest ECB Bond Buying, U.S. Jobless Data

(Bloomberg) — Gold pared gains after the European Central Bank’s decision to reduce the pace of bond buying and signs of further recovery in the U.S. labor market.

The ECB will slow the pace of its pandemic bond-purchases program in the final quarter of 2021, a shift President Christine Lagarde said isn’t a move heralding a wind-down in stimulus. Applications for U.S. state unemployment benefits fell last week by the most since late June.  

Gold has been trading in a narrow range, with investors weighing prospects for a pullback in bond buying against a resurgent pandemic that could dent growth, underpinning demand for the haven metal.

“While the gold market is well aware of eventual tapering and has largely adjusted prices to that reality, hawkish tapering comments still have the power to weigh on prices,” James Steel, chief precious metals analyst at HSBC Holdings, said in a note.

In the U.S., Federal Reserve Bank of Dallas President Robert Kaplan said he would support a plan to adjust the bank’s bond buying program soon after the September meeting. On the other hand, Atlanta Fed President Raphael Bostic suggested more time is needed.

Gold rose 0.1% to $1,791.73 an ounce as of 11:29 a.m. in New York, after rising as much as 0.7%. Silver gained, while platinum was steady.

  • Palladium, which reached a record high earlier this year, fell to the lowest in seven months. The World Platinum Investment Council said this week that it expects the higher cost of the metal used in vehicle pollution-control devices to spur a gradual switch by automakers to using more platinum in gasoline-powered cars and trucks. Both metals have been hurt by expectations that auto output will remain constrained by a shortage of semiconductors.

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